Trouble for Big Oil

Oil producers have evidently severely underestimated the growth of the electric car. In the past year, OPEC (Organization of Petroleum Exporting Countries) has raised its expectations of EV sales by 2040 from 46 million to 266 million, nearly a 500% increase. Likewise, auto manufacturers are already putting together plans with the expectation of higher sales, but with much higher expectations than OPEC. Top manufacturers have a combined plan to reach constant sales of 6 million EVs per year by 2025, and 8 million per year by 2030. This alone would equal around half of OPEC’s expectations, so when other EV manufacturers add to this, EV sales could exceed OPEC’s predictions. So, what does this mean? The EV market has seen solid growth, and although the oil and auto industry anticipate this growth, this discrepancy in outlooks means either the auto industry is overestimating growth, or the oil industry is underestimating growth. Either situation is a win for the EV industry, but underestimating the decline of gas-dependent cars could spell major trouble for the multibillion dollar oil industry, and industries like green energy may have to work overtime to make up for the effect on the world economy.